Apple: What goes up, might come down

Posted on Posted in Beloved Brands in the Market

 

The Apple brand of today is still healthy, the stores are still packed and sales are still strong. But the fear is that if Apple’s innovation over the next 18 months looks like Apple’s innovation of the past 18 months, then the Apple brand may be at its peak, no longer on the climb.   

My hope is that Apple finds their way and regains the momentum of the brand that has surprised and delighted us like no other brand. But my fear is they become another Sony that rests on their laurels and coasts for the next decade. I’m a big Apple fan, typing away on my MacBook Air with my iPad mini and iPhone close by and my iMac sitting on my desk. But it sure does feel like Sony of the early 1990’s. There’s talk of geographic expansion into China, but that might take their eyes off the real need: we need to see real innovation. Enough of the incremental BS. What do you have that will surprise me beyond my wildest dreams?

Five Connectors of a Beloved Brand

To be a Beloved Brand, you must have an idea that’s worth loving.  Under the Brand Idea are 5 sources of connectivity (see diagram below) that help connect the brand with consumers and drive Brand Love, including

  1. Brand promise
  2. Strategic choices
  3. Ability to tell their story
  4. Freshness of the product or service
  5. Overall experience and impressions it leaves with you.  

Everyone wants to debate what makes a great brand–whether it’s the product, the advertising or the experience.   It is not just one or the other, but the collective connection of all five that make a brand beloved.  If one of them weakens against the brand promise, it puts the entire brand at risk.

Slide1

The big idea behind Apple is complexity made simple. Since every great brand tackles an enemy of the consumer, Apple takes on the frustration and intimidation that consumers have with technology. The Apple brand promise is we make it easier to love technology, so that you can experience the future no matter who you are.  

Problem #1:  Has Apple Broken their Promise? 

Over the last decade, Apple has done an amazing job in creating products that take the most complicated of technology and deliver it so that anyone can use it. Apple takes the technology out of technology so we can all benefit. That’s right–“so we can all benefit”.  Apple is now a brand owned by the Masses. Yes, the masses rely on the innovators for advice, but Apple caters as much to my 70-something mother (iPad owner) as it does to my 14-year old daughter (iPhone user).  

There are 4 instances in the past 18 months where Apple has gotten off track:  

  1. Apple Maps were a disaster in more ways than one. The first week of iPhone 5 owners was largely filled with the most loyal Apple users, the innovators who will influence the rest of us. And the maps disaster was the first major flaw of the post-jobs era that people were waiting for.   
  2. Siri remains a disaster. Siri does not deliver the promise as it adds frustration, not solves it. Siri is a nice little toy that combined with Apple’s auto-correct takes my enunciation and turns into words I’ve never dreamed of saying. I end up having to re-type the mistakes of Siri, which defeats the whole purpose behind voice recognition.  If these were brakes on a car, it would be re-called for the safety of society. It’s unlike Apple to release such a bad product.   
  3. Retina Display is not a mass play. The launch of iPad 3 feels odd. They kept the iPad 2 out in the market and didn’t even put the #3 on the iPad 3. It feels like something the niche Apple brand would have done, but now that you are a mass brand, you must cater to your consumer.  
  4. Apple TV has done nothing really. While a few friends have it, I hear no one talking about it. A quiet Fizzle.  

USP 2.0

Strategically, these 4 innovations were some of the big plays by Apple in the past 18 months. And where do they fall on the test of uniqueness? The Maps puts you in the losing zone where you are competing with Google Maps in the zone where they kick your ass.  Retina Display ends up being a niche play for photographers or fussy consumers, but for the rest of us it is in the “who cares”, certainly not worth an extra $150 compared to the iPad 2. And Siri is not on the map, because it’s just an under-delivery that while it’s an innovation that leads the consumer, it only ends up frustrating them even more.   

Problem #2: Is Apple still making a dent in the universe?

What caused Apple to rise so fast during the first decade of the century was innovation–the iPod followed by iTunes, the iMac vs the PC, the iPhone and then the iPad revolutionized the way we interact socially. In many cases, Apps have replaced software.   Wow, Wow and Wow!!!

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But, the last 15 months has been a period of incrementalism.  In 2012, we saw iPad 3, iPhone 5 and iPad Mini and the fear among investors is that 2013 might be iPad 4, iPhone 6 and iPad Mini 2. Slightly better, slightly lighter, but just as expensive. There becomes less and less of a reason to trade up. And sadly, at risk, less and less of a reason to love the brand. Technology is about leap-frog. And the world will not stand still in the next year. Brands like Google and Samsung are ready to leap.  

Steve Jobs always talked about “Making a dent in the Universe” and people bought in and followed. Apple’s beauty has always been to give us what we never imagined.  And yet, now we are starting to not only imagine it, but predict it.  Everyone saw the iPad Mini coming. In fact, we asked for it and Apple merely succumbed to our request. Technology is supposed to surprise us with advances that not only meet our needs but cater to the needs we didn’t even know we had. Apple has to get that back.  

Is Apple still making a dent in the Universe?  

Problem #3: Apple must quiet the “Anti” Apple Segment

Haters are always going to hate. In the technology space, the innovators and early adopters are those who tell the rest of us what to think and do. These consumers are constantly looking for the “technology fraud” and it feels as though some are starting to call Apple on it. The Samsung advertising has capitalized on this insight, openly mocking the iPhone5 launch. The only way Apple can shut this down is with action on the technology front. If Apple’s next product is the iPad Mini with Retina display or  the iPad4 comes with a better battery life than this group will become even more outspoken.

There are so many parodies of Apple being shared by millions that not only mock the technique of the advertising but the incrementalism of their technology.  This only fuels the haters.  

Problem #4: Leadership Style

When Tim Cook took on the Apple brand, people worried but became re-assured that he had been running the Apple brand for a while. The brand was on a high after an amazing decade under Steve Jobs, and as a leader he faced a “sustaining success” leadership challenge. Keep the momentum going. Can anyone re-live that visionary relentless pursuit of perfection that Jobs brought to the role.  

Now it appears that Cook faces a “re-alignment” challenge. Cook needs to re-invigorate the R&D at Apple to push for innovation that goes beyond expectations. Making a dent in the universe means pushing for greatness, not settling for OK incremental-ism. Cook has quickly fired all those connected to the Maps fiasco. But, he has to look at himself in the mirror for wondering how it got out past him. The pressure is definitely on. The questions of 18 months ago are back:  

Can Tim Cook do it?   
The World and the stock market are watching Apple.

To read How to Create and Run a Beloved Brand, read the following presentation:


Positioning 2016.112

Apple is Facing Major Declines…

Posted on Posted in Beloved Brands in the Market

Those are fighting words for most Mac, Iphone or Ipad users. If you are in the Apple tribe, that headline probably gets your blood boiling, ready to call me an idiot and tear into this blog. But, I don’t really mean it. I hope that you’re totally upset, so I can prove a point, as to how loyal Apple users are. So relax and enjoy the article. It’s all about how great Apple is. In fact, I’m typing on my Mac as I speak, with my Ipad charging away about a foot away. I could not live without my Ipad–stylus and all.

A few weeks ago, someone asked for a good marketing book to read. I said “Have you read the Steve Jobs biography, because that would be a great starting point.”  I do believe that aside from his craziness, Steve Jobs is the best marketer of our generation. Everything he did was about the consumer, not just in taking their feedback but in guessing what they might want next. He was committed to the art of marketing, from the design in the product and software right down to some of the best advertising of our generation whether it’s “1984” or “I’m a Mac”.  He was obsessive in his commitment. He had to love the work or he’d reject it.  His bar was exceptionally high.

For Apple to this point, it has all been about Steve Jobs and thinking differently.  With his own voice, here is what makes Apple great.

 

Brands travel along the Love Curve, going from Indifferent to Like It, to Love It and finally become a Brand For Life.  When you achieve the ultimate status as a Beloved Brand, demand becomes desire, needs become craving and thinking is replaced by feelings. And, Apple is the most loved of all Brands. When you love a brand like Apple, you are loyal, unrelenting and outspoken. Try saying something negative about Mac to someone in the tribe and watch out. That’s like knocking their favourite sports team. To Apple users, it’s very personal: you are possessive of your Apple brands you own. It’s extremely emotional for you, certainly not rational.

Nothing comes close to what Apple has done over the past 10 years, whether it’s in desktop computers, laptops, mp3 players, smart phones, tablets and even the retail space. Three times this year, I’ve walked past an Apple store before the mall opens, and there are usually 10-15 people waiting for the doors to open up. I’m sure every retailer would love that.

Samsung and Microsoft are strong brands, but stuck at the Like It stage.  While consumers gladly buy their products, no one is going to stand up and defend them. People are indifferent about Brands like Dell and HP who have commoditized laptops, charging a slight premium, but barely.  Even Sony has fallen from grace, recently announcing billions in losses.  If you are born before 1975, and rarely buy electronics, you still think “wow, that’s a great price on a Sony”.   But that group gets smaller every year.  The HTC brand only wins from carrying Android, but no one really cares they have an HTC phone.

Apple has an amazing brand following.  It’s like a tribe of loyalists ready to speak out and defend the brand.   How have they done this?

1.  Products that the consumer doesn’t even know they want yet:  While in the technology field, Apple has never done the better mousetrap. Apple is all about the consumer. Apple has an invention mindset.  It’s more than just making money. They want to make a dent in the universe.  It’s about thinking different and delivering something the consumer could never have imagined. Apple carefully considers what consumers are looking for. They are completely meticulous in the planning and design stage. They keep things plain, simple and so easy-to-use products not only to make the consumers happy, but also make them want to buy more products in the future. Apple is an idea connected to simplicity, not just a series of products.

“You’ve got to start with the consumer experience & work backwards to the technology.  You can’t start with the technology & try to figure out where you’re going to sell it”

Steve p. Jobs

2.  Are You a Mac?: Let’s face it, Apple is a cool, hip brand. It pushes a strong identification with everything young, up-to-the-minute and smart. The “I’m a Mac Campaign” was brilliant in not only defining the Mac brand as smooth, confident and cool, but defining the PC brand as old, uptight and awkward. At the height of this campaign I was in a crowded bar that went immediately silent when one of the “I’m a Mac” TV ads came on. Also, many of the Apple products have separated themselves from the competitor, whether it’s the white headphones on the iPod, the number of apps for Iphone and Ipad or the cool sleek designs of the Mac.  Not only that, the Apple store is a store just for Apple users.  My mom, who is 77 and a recent ipad user has been to the Apple Store numerous times, taking some of the courses or just asking for help.

For fans of the “I’m a Mac” campaign, here are 15 ads.

3.  An Obsessive Commitment to the Consumer and the Apple Brand.  Stemming from Steve Jobs, the entire company is committed to simplicity in design and functionality. Whether it’s the rounded edges, colour choices for product or the Glass on the Apple stores, there is a certain obsessive behavior. Sometimes you wonder if it’s worth it, but would Apple be Apple if it wasn’t for these obsessions?

Apple leverages this obsession to create consumer loyalty. Looking at the phone industry loyalty data, Apple has by far the highest loyalty of any brand:  over 90% of their consumers love the Iphone. Brands like HTC, Blackberry and Sony have scores in mid 60s while Samsung has only 57% prefer the Samsung. Creating the tribe is great, but Apple delivers satisfaction to their consumers.

To be a Beloved Brand, you must love the work you do. If you don’t love the work you do, how do you expect your consumer to fall in love with your brand?   Brands that are stuck at the like stage settle for ok. Beloved Brands like Apple start at great and still push to make it even better. They are never satisfied.

The more loved the brand, the more valuable the brand. The tight emotional connection with the consumer becomes a source of power it can leverage whether that’s with consumers themselves to pay more, stay loyal or buy more products.   Plus, that power can be leveraged with retail partners, suppliers or competitors.  

In 1976, early in the life of Apple, Ronald Wayne decided to cash in his 10% of Apple for around $800. If he held onto it, that 10% would be worth $56 Billion. Mind you, we have all missed out on quite a few investment windows over the years. If you had put $100K into Apple in 2003, you would have around $10 Million!!! You wouldn’t be complaining about the economy, wondering who to vote for in the fall. But unfortunately, I didn’t know Apple would do so well.  Has the Apple brand peaked? Hardly: Apple has gained 81% in market cap the past 12 months. I missed that window as well.   

My hope is that momentum can continue. Not because I have invested money, but because I’m emotionally invested. I crave what’s next, even though I can’t even imagine where they will go.

Positioning 2016.111
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